HOFFMAN, et al v. ZIPPRICH, et al

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NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24 IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE CARL G. HOFFMAN and MARY K. HOFFMAN, as Trustees under Trust Agreement dated March 8, 1984; and HOFFMAN FAMILY LIMITED LIABILITY PARTNERSHIP; WOOD-MCCASLIN, INC., an Arizona corporation; FIRST AMERICAN TITLE COMPANY, a California corporation, ) ) ) ) ) ) ) ) ) ) Appellees, ) ) v. ) ) ZIPPRICH GROUP. LLC; and WILLIAM ) CLEVERLY, ) ) Appellants. ) __________________________________) CARL G. HOFFMAN and MARY K. ) HOFFMAN, as Trustees under Trust ) Agreement dated March 8, 1984; ) HOFFMAN FAMILY LIMITED LIABILITY ) PARTNERSHIP, ) ) Petitioners, ) ) v. ) ) THE HONORABLE ALFRED FENZEL, ) Judge of the SUPERIOR COURT OF ) THE STATE OF ARIZONA, in and for ) the County of MARICOPA, ) ) Respondent Judge, ) ) DIVISION ONE FILED: 1/22/2013 RUTH A. WILLINGHAM, CLERK BY: mjt Court of Appeals Division One No. 1 CA-CV 12-0072 A 1 CA-SA 12-0247 1 CA-SA 12-0280 (Consolidated) Maricopa County Superior Court No. CV2005-005003 CV2009-040211 CV2010-019594 (Consolidated) Department E MEMORANDUM DECISION WOOD McCASLIN, INC., an Arizona corporation, ) ) ) Real Party in Interest. ) __________________________________) CARL G. HOFFMAN and MARY K. ) HOFFMAN, as Trustees under Trust ) Agreement dated March 8, 1984; ) and HOFFMAN FAMILY LIMITED ) LIABILITY PARTNERSHIP, ) ) Petitioners, ) ) v. ) ) THE HONORABLE ALFRED FENZEL, ) Judge of the SUPERIOR COURT OF ) THE STATE OF ARIZONA, in and for ) the County of MARICOPA, ) ) Respondent Judge, ) ) THE ZIPPRICH GROUP, LLC and ) WILLIAM CLEVERLY, ) ) Real Parties in Interest. ) __________________________________) Appeal from the Superior Court in Maricopa County Cause Nos. CV 2005-005003; CV 2009-040211; CV 2010-019594 The Honorable Paul A. Katz, Judge (Retired) The Honorable J. Kenneth Mangum, Judge (Retired) The Honorable Alfred M. Fenzel, Judge JUDGMENT AFFIRMED; JURISDICTION ACCEPTED; RELIEF DENIED Greenberg Taurig, LLP Phoenix by Brian J. Schulman Julie R. Barton Attorneys for Appellants Zipprich Group and William Cleverly Helm, Livesay & Worthington, LTD by Roberta S. Livesay Raushanah Daniels Tempe 2 Attorneys for Appellees Hoffmans Gust Rosenfeld, P.L.C. Tucson by Mark L. Collins Robert M. Savage Attorneys for Appellee First American Title Insurance Company H A L L, Judge ¶1 In 1 CA-CV 12-0072 A, the Zipprich Group, LLC and William Cleverly superior court s closing funds) (collectively, judgment deposited Zipprich) holding with First that appeal certain American from monies Title the (the Insurance Company (First American) by Wood-McCaslin, Inc. (Wood-McCaslin) are not subject to garnishment. We also address two special actions filed by Carl and Mary Hoffman (the Hoffmans) that have been consolidated with Zipprich s appeal.1 As explained below, we affirm the judgment on direct appeal and deny the Hoffmans requests for relief in 1 CA-SA 12-0247 and 1 CA-SA 12-0280. FACTS AND PROCEDURAL BACKGROUND2 ¶2 This case involves the purchase of approximately 240 acres of undeveloped land near Casa Grande. Apex, Wood-McCaslin s On October 7, 2004, predecessor-in-interest (referred to as 1 Although Zipprich is not a party in 1 CA-SA 12-0247, we have permitted it to intervene in that matter for the limited purpose of opposing the petition for special action. 2 We view the facts in the light most favorable to sustaining the trial court s judgment. Southwest Soil Remediation, Inc. v. City of Tucson, 201 Ariz. 438, 440, ¶ 2, 36 P.3d 1208, 1210 (App. 2001). 3 Wood-McCaslin herein), executed two contracts to purchase two parcels of real property from the Hoffmans for a total purchase price of $6,718,000. contracts, the Pursuant to the terms of the purchase Hoffmans agreed to finance a portion of the purchase price, $5,038,500, secured by notes and deeds of trust in favor of the Hoffmans. The purchase contracts required Wood- McCaslin to make a series of scheduled earnest money deposits totaling $130,000 during the escrow period. In addition, Wood- McCaslin agreed to pay the balance, $1,549,500, with additional cash to close escrow. As set forth in the purchase contracts, the parties were scheduled to close escrow on April 29, 2005. ¶3 During the escrow period, the area where the two subject parcels are located experienced a dramatic increase in land value. On March 22, 2005, the Hoffmans filed a complaint in superior court seeking declaratory relief (CV2005-005003). The Hoffmans alleged that Wood-McCaslin failed to make an earnest money deposit for each purchase contract ($50,000 and $15,000, respectively) as scheduled on February 22, 2005. The Hoffmans asserted that Wood-McCaslin s payment of the earnest money a day late was a material breach authorizing the Hoffmans to unilaterally terminate the purchase contracts. ¶4 On April 25, 2005, Wood-McCaslin counterclaimed for specific performance. Three days later, Wood-McCaslin deposited 4 the additional cash to close escrow required under the purchase contracts, $1,549,243.30, with First American. ¶5 The next day, on April 29, 2005, Zipprich and Wood- McCaslin entered a Letter of Agreement, pursuant to which Zipprich loaned Wood-McCaslin, and its principals, Philip and Stacie Polich (the Poliches), $1,120,000 through two promissory notes. The Zipprich/Wood-McCaslin Agreement provided that the proceeds of the loans were to be used solely to pay those amounts payable McCaslin by purchase [Wood-McCaslin] contracts. under Pursuant to the Hoffman/Wood- the terms of the promissory notes, the loans were to be repaid the earliest of (i) the ninetieth (90th) day following the date of this note, [or] (ii) the return to [Wood-McCaslin] of the Closing Funds. Wood-McCaslin never repaid the loans. ¶6 On January 22, 2007, the superior court entered judgment in favor of Wood-McCaslin, ordering the Hoffmans to specifically perform and convey the properties to Wood-McCaslin. ¶7 filing During of its the lengthy counterclaim period in April between 2005 Wood-McCaslin s and the superior court s January 2007 judgment ordering specific performance in Wood-McCaslin s favor, the area where the two subject parcels are situated experienced a tremendous decrease in land value. On December 26, 2007, Wood-McCaslin moved for relief from the specific performance judgment pursuant 5 to Rule 60(c) of the Arizona Rules of Civil Procedure, claiming that the Hoffmans had failed to inform certain easements. them that the properties were subject The superior court denied the motion. to Wood- McCaslin appealed the superior court s denial of its Rule 60(c) motion and, on July 2, 2009, this court affirmed. ¶8 Wood-McCaslin then petitioned court s decision to the supreme court. for review of this On December 30, 2009, while the petition for review was pending, Zipprich filed a complaint against Wood-McCaslin alleging breach of contract (CV 2009-040211) for Wood-McCaslin s failure to repay the April 29, 2005 promissory notes. In February 2010, Zipprich and Wood- McCaslin entered a settlement and tolling agreement in which Wood-McCaslin admitted to defaulting on its loan and Zipprich agreed not to attempt to recover its monies from any source other than the closing funds. On March 31, 2010, the superior court entered a stipulated judgment awarding Zipprich $2,045,000 plus interest against Wood-McCaslin, subject to the terms of the parties settlement and tolling agreement. ¶9 On April 7, 2010, the McCaslin s petition for review. supreme court denied Wood- On April 27, 2010, this court issued its mandate affirming the superior court s judgment. ¶10 On April 29, 2010, garnishment on First American. acknowledged that it was Zipprich served a writ of In its answer, First American holding 6 the closing funds, plus interest, but stated that it would not release the closing funds without a court order because the Hoffmans and Wood-McCaslin had made conflicting notified the claims to Hoffmans, Zipprich/Wood-McCaslin the who monies. moved litigation First to and American intervene quash also in writ the the of garnishment. ¶11 In June 2010, the Hoffmans filed a proposed judgment on mandate in the superior court, directing specific performance of the real estate contracts attorneys fees and costs. and including an award of On June 7, 2010, Zipprich moved to intervene in this case and filed an objection to the proposed form of judgment, contending it was the party entitled to the escrow funds. Zipprich also moved for summary judgment in the garnishment action. issued a minute consolidate On October 28, 2010, the superior court entry granting CV2005-005003 contract/specific American s litigation), breach of contract motion to breach (Hoffmans/Wood-McCaslin performance (Zipprich/Wood-McCaslin First of CV2009-040211 litigation), and CV2010-019594 (the garnishment action) under CV2005-005003. ¶12 On April 8, 2011, the superior court denied Zipprich s motion for summary judgment on its garnishment claim. 2011, the superior court granted First American s In June motion to interplead the closing funds due to continuing doubt over the competing claims to the funds. Pursuant to the court s order, 7 First American deposited the closing funds with the clerk of the court. ¶13 On October 12, 2011, the superior court entered a judgment on mandate ordering the parties to close by December 31, 2011. appeal, On November 14, 2011, Zipprich filed a notice of seeking review of the October 12, 2011 judgment on mandate. ¶14 On December 19, 2011, the superior court entered a signed judgment dismissing Zipprich s garnishment claim, ruling that the closing funds deposited with First American were not nonexempt monies because they were subject to a previous order to close escrow. Specifically, the superior court stated in relevant part: [A]t the time the writ of garnishment was served on First American Title Insurance Company the closing funds subject to the garnishment were not non-exempt monies of judgment debtor Wood-McCaslin, Inc., because those funds were then, and are now, subject to an order to close escrow. ¶15 On December 22, 2011, Zipprich timely appealed from the superior court s judgment dismissing the garnishment action. The appeal was assigned Cause No. 1-CA-CV 12-0072 in this court. ¶16 On December 30, 2011, Wood-McCaslin filed for bankruptcy protection and escrow did not close on December 31, 2011 as ordered by the superior court. 8 The Hoffmans objected and moved to dismiss, and, on March 15, 2012, the bankruptcy court dismissed the bankruptcy petition. ¶17 In April 2012, the Hoffmans filed an application for appointment of a receiver to complete the sale of the property, transfer title, and distribute the escrow funds. In their application, the Hoffmans expressed concerns about the delay in closing and their continuing obligation to pay taxes on the subject properties, notwithstanding the superior court s order to close escrow by the end of December 2011. ¶18 On April 11, 2012, Zipprich moved for a stay of all proceedings in the superior court pending the resolution of its appeals. The Hoffmans opposed the stay request and, in the alternative, argued that the superior court should require Zipprich to post a supersedeas bond. ¶19 On May 23, 2012, a motions panel of this court denied Zipprich s motion to consolidate Zipprich s appeal of the its superior appeals court s and October dismissed 12, 2011 judgment on mandate for lack of jurisdiction, explaining that any challenge involving a judgment entered following an appeal and issuance of the mandate must take the form of a special action. In July 2012, the superior court denied the Hoffmans motion to sever the previously consolidated cases, denied the Hoffmans request for a receiver, and emergency motion for stay pending appeal. 9 granted Zipprich s The Hoffmans moved for reconsideration and requested an expedited hearing on their request for a supersedeas bond. On October 31, 2012, the Hoffmans filed a special action (SA 12-0247) seeking relief from the superior court s entry of stay and denial of its request for a receiver. On November 28, 2012, this court accepted jurisdiction over the special action, granted Zipprich s motion to intervene, consolidated the matter with CV-12-0072, and accelerated the appeal on its own motion. ¶20 On November 16, 2012, the superior court denied the Hoffmans request for a supersedeas bond. The Hoffmans filed a motion for reconsideration, which was eventually denied. The Hoffmans then filed a special action (I CA-SA 12-0280) seeking relief from the superior court s denial of their request for a superseadeas bond. The Hoffmans request that the special action be consolidated with 1 CA-CV 12-0072 was granted by this court. We pursuant to 2101(A)(1) have jurisdiction Arizona (Supp. Revised 2012). over Zipprich s Statutes We have (A.R.S.) direct appeal section previously 12- accepted jurisdiction over 1 CA-SA 12-0247 and we now accept jurisdiction over 1 CA-SA 12-0280 pursuant to Arizona Rule of Procedure for Special Actions 1(a). ISSUES ¶21 In its appeal, Zipprich raises a single issue: (1) Did the superior court err by finding that the closing funds are not 10 subject to garnishment? In their consolidated special actions, the Hoffmans raise two issues: (1) Did the superior court err by granting entry of stay pending Zipprich s appeal and failing to execute the judgment on mandate? (2) Did the superior court err by denying the Hoffmans superseadeas bond? request that Zipprich post a erred by We address each issue in turn. DISCUSSION I. Status of the Closing Funds ¶22 Zipprich contends that the superior court finding that the closing funds are not subject to garnishment. Specifically, Zipprich asserts that, notwithstanding the January 2007 specific performance judgment, Wood-McCaslin maintained legal title to the closing funds and therefore the monies were subject to garnishment as of the date Zipprich filed its writ of garnishment. ¶23 In reviewing a superior court s dismissal of a writ of garnishment, we view all evidence in the light most favorable to sustaining the judgment and will uphold the court s factual findings if they are justified by any reasonable construction of the evidence. 968 P.2d 1048, Figueroa v. Acropolis, 192 Ariz. 563, 564, 1049 (App. 1997). We review, superior court s legal conclusions de novo. P.2d at 1050. 11 however, the Id. at 565, 968 ¶24 Garnishment is a creature of statute and is governed by the terms of the statute. Weir v. Galbraith, 92 Ariz. 279, 286, 376 P.2d 396, 400 (1962). As set forth in A.R.S. § 12- 1584(B), if a party timely objects to a writ of garnishment, the superior court shall hold a hearing to receive evidence and argument. After holding such a hearing, the court shall: determine whether the writ is valid against the judgment debtor, what amount is presently due and owing on the underlying judgment and what amount of nonexempt monies, if any, the garnishee was holding for or owed to the judgment debtor at the time the writ was served, and the court shall enter judgment on the writ against the garnishee for that amount or enter an order discharging the garnishee if no nonexempt monies are determined owing. Id. (emphasis added). As defined in A.R.S. § 12-1570(7), [n]onexempt monies or property means monies or property which are not restricted by law from judicial process. A.R.S. § 12- 1570(7). ¶25 Our goal in interpreting a statute is to find and give effect to the intent of the legislature. Mail Boxes, Etc. U.S.A. v. Indus. Comm n, 181 Ariz. 119, 121, 888 P.2d 777, 779 (1995). We look first to the language of the statute, and if the language is clear and unambiguous, we must give effect to that language construction. 177 Ariz. and do not use other rules of statutory Canon Sch. Dist. No. 50 v. W.E.S. Constr. Co., 526, 529, 869 P.2d 500, 503 (1994); Janson v. Christensen, 167 Ariz. 470, 471, 808 P.2d 1222, 1223 (1991). 12 The interpretation of a statute presents a question of law, which we review de novo. Schwarz v. City of Glendale, 190 Ariz. 508, 510, 950 P.2d 167, 169 (App. 1997). ¶26 Citing A.R.S. § 12-1570(2), which defines exempt monies or property as monies or property that, pursuant to a state or federal law, is not subject to judicial process, Zipprich contends that monies are subject to garnishment unless specifically protected by statute. Accordingly, Zipprich asserts that the superior court s specific performance judgment could not place garnishment. the closing funds beyond the reach of Zipprich raises this claim for the first time in its reply brief, and the issue is therefore waived. See Varsity Gold, Inc. v. Porzio, 202 Ariz. 355, 357, ¶ 9, 45 P.3d 352, 354 (App. 2002) (explaining that arguments raised for the first time in a reply brief deprive the other party of the opportunity to respond and are therefore deemed waived). ¶27 Nonetheless, even assuming that the qualifying phrase state or exempted federal, as monies used to in those A.R.S. § protected 12-1570(2), by limits statute, no corresponding qualifying language is included in A.R.S. § 121570(7). Rather, A.R.S. § 12-1570(7) defines nonexempt monies as not those A.R.S. § restricted 12-1584 provides subject to garnishment. by law that from only judicial process and nonexempt monies are If the legislature had intended to 13 qualify nonexempt monies with such a limitation, it could have done so expressly, and did not. See State v. Jennings, 150 Ariz. 90, 93, 722 P.2d 258, 261 (1986) ( If the legislature had intended to have [certain] language, found in one statute but not in a related statute, apply to both [statutes], it could have simply placed it in both sections ); see also Braden Trust v. County of Yuma, 205 Ariz. 272, 278, ¶ 29, 69 P.3d 510, 516 (App. 2003) ( It is not in the court s power to change legislative enactments; our duty is to interpret the law and apply it as written. ). Absent such qualifying language in A.R.S. § 12-1570(7), we ascribe the plain and ordinary meaning of the term law. Law is defined as [a] rule established by authority, Webster s II New College Dictionary 622 (1995), and [t]he judicial and administrative process; legal proceedings, Black s Law Dictionary 363 (1996). action and See W. Corr. Group., Inc. v. Tierney, 208 Ariz. 583, 587, ¶ 17, 96 P.3d 1070, 1074 (App. 2004) (citing State v. Wise, 137 Ariz. 468, 470 n.3, 671 P.2d 909, 911 n.3 (1983) (in determining the plain meaning of a term in a statute, courts refer to established and widely used dictionaries). law is Thus, the plain and ordinary meaning of sufficiently broad to encompass court orders and judgments, such as at issue here. ¶28 The parties do not dispute that Zipprich holds a valid judgment against Wood-McCaslin in the amount of $2,045,000 plus 14 interest. Therefore, the narrow issue before us is whether the closing monies were nonexempt at the time Zipprich filed its writ of garnishment. More specifically, we must determine whether the superior court s January 2007 specific performance judgment rendered the closing funds not nonexempt, that is, not subject to judicial process. ¶29 In entering judgment in favor of Wood-McCaslin on its specific performance claim, the superior court found: [Wood-McCaslin], on April 29, 2005, tendered to the [Hoffmans] by and through escrow agent, First American Title Insurance Company, Wood-McCaslin s complete and unconditional performance of its contractual duties under [the purchase contracts]. Thus, the specific performance judgment provides that the closing funds are the additional cash to close escrow WoodMcCaslin was required to pay under the terms of the contracts, and the monies are therefore payable to the Hoffmans upon their tender of Zipprich s withdraw escrow, title to argument the we closing conclude the that subject properties. Wood-McCaslin funds that at any any was time reasonable and before Contrary to is free to the close of construction of the effect of the court s order forecloses this possibility. ¶30 Relying on case law from Arizona and other jurisdictions holding that a depositor of funds in escrow with a title company generally retains legal title to those funds until the close of escrow, Zipprich 15 asserts that Wood-McCaslin controlled the disposition of those funds garnishment was served on First American. when the writ of Therefore, according to Zipprich, the funds were subject to garnishment. We are not persuaded. ¶31 Although Wood-McCaslin retained legal title to the escrow funds, the Hoffmans obtained equitable ownership, see Jarvis v. Chanslor & Lyon Co., 20 Ariz. 134, 136, 177 P. 27, 28 (1919) (explaining that when a deed is placed in escrow, the grantor holds the legal title and the grantee the equitable title), essentially creating a Hoffmans as the beneficiaries. 523, 530 (1st trust relationship with the See In re NTA, LLC, 380 F.3d Cir. 2004) (explaining that when property is placed into escrow, a trust is created: The beneficiary of the trust holds an equitable interest in the property, consisting of the right to obtain legal title to the property pursuant to the terms of the contractual agreements between the parties. (applying Illinois law)). other than the debtor And a beneficial interest in a person is not garnishable. 6 Am. Jur. 2d Attachment and Garnishment § 154 (2012); see also Webster v. USLIFE Title Co., 123 Ariz. 130, 132-34, 598 P.2d 108, 110-12 (App. 1979) (holding that funds deposited in escrow by a purchaser from which a broker s commission was to be paid were not subject to garnishment). 16 ¶32 Even if we were to assume that Wood-McCaslin retained control of the closing funds when they were placed in escrow and that they therefore could have been garnished,3 it voluntarily relinquished any right to control the funds when it later sought and obtained the specific performance judgment. That judgment did not order Wood-McCaslin to pay the additional cash to close escrow ; rather, it found that Wood-McCaslin had already done so. Accordingly, the court did not order Wood-McCaslin to tender performance, but ordered the Hoffmans to tender title. The specific performance judgment indisputably placed the closing funds beyond the reach of Wood-McCaslin, and thereby 3 Although Zipprich repeatedly claims in its appellate briefing that Wood-McCaslin instructed First American to void all closing documents and return the closing funds to Wood-McCaslin if escrow did not close by May 6, 2005, this claim is, at best, a mischaracterization of the record. In a letter dated April 29, 2005, counsel for Wood-McCaslin informed First American that it was to call counsel for further instructions if escrow did not close by May 6, 2005. The letter also stated that such further instructions . . . may include . . . an instruction that you mark as void all Closing Documents executed by Buyer and the return to Buyer all of Buyer s Funds. (Emphasis added.) Zipprich has not cited, and our review of the record has not revealed, any evidence that Wood-McCaslin actually instructed First American to return the funds before the superior court entered its January 2007 specific performance judgment. Indeed, the record reflects that Wood-McCaslin first requested that First American return the funds in September 2007, approximately eight months after the specific performance judgment was entered. We also note that Wood-McCaslin never sought a court order to compel First American to return the funds before the specific performance judgment was entered. Therefore, Zipprich s suggestion that First American engaged in wrongdoing by failing to return the funds in 2005, and that this alleged wrongdoing provides an additional basis for Zipprich s entitlement to the closing funds, is devoid of merit. 17 beyond the reach of Zipprich s derivative rights as garnishor. Mid-State Elec. Supply Co. v. Ariz. Title Ins. & Trust Co., 105 Ariz. 321, 323-24, 464 P.2d 604, 606-07 (1970) ( The rights of the garnishor-creditor to the assets in the hands of the garnishee are no greater than the rights of the defendant-debtor to those assets. ). Therefore, the superior court did not err by finding the closing funds are not non-exempt monies and dismissing Zipprich s writ of garnishment.4 II. Failure to Execute Judgment on Mandate and Denial of Request for Appointment of Receiver ¶33 In the first of their consolidated special actions (1 CA-SA 12-0247), the Hoffmans argue the superior court had no discretion to fail to execute the judgment on mandate.5 They further contend that the court erred by denying their request for appointment of a receiver to complete the sale of the property. ¶34 The Hoffmans have cited no authority, and indeed acknowledge there is no case law, that addresses the precise issue presented here, namely, whether a superior court may enter 4 Based on our resolution of this issue, we need not reach the Hoffmans alternative claim that Zipprich is a privy of WoodMcCaslin and it has no greater right to the closing funds than Wood-McCaslin. 5 Even though our decision resolves the sole issue on appeal, we nonetheless address the propriety of the superior court s stay order because of the potential for further legal proceedings before the issuance of the mandate on appeal. 18 a stay and postpone execution of a judgment on mandate when a third-party garnishor has a potentially viable monies at issue in the underlying judgment. claim to the Although a superior court is bound by a decision and mandate of an appellate court and may not review or alter the appellate court s determination, see Tovrea v. Superior Court, 101 Ariz. 295, 297, 419 P.2d 79, 81 (1966), we conclude the issue presented to the superior court by Zipprich s request for a stay of the judgment on mandate while it pursued an appeal in the garnishment judgment was distinct from the issues finally determined under the mandate issued by this court. The superior court therefore did not exceed its authority when it entertained Zipprich s request for stay on appeal. ¶35 Our determination that the superior court did not improperly fail to execute our mandate when it granted the stay renders moot the Hoffmans assertion that the court erred by not appointing a receiver. Cf. 38 C.J.S. Garnishment § 251 (2012) ( A garnishment is a ground for a stay of execution on another judgment against the garnishee pending resolution of the garnishment proceeding, if there are conflicting claims to the funds. ). III. Denial of Request for Supersedeas Bond ¶36 12-0280), In their second consolidated special action (1 CA-SA the Hoffmans contend 19 the superior court erred by staying the garnishment judgment without first ordering Zipprich to post a supersedeas bond and denying the Hoffmans request for a hearing on the matter. ¶37 We review a superior court s denial of a request for a supersedeas bond for an abuse of discretion. See Salt River Sand and Rock Co. v. Dunevant, 222 Ariz. 102, 107 n.5, ¶ 12, 213 P.3d 251, 256 n.5 (App. 2009). The Hoffmans rely on the version of Arizona Rule of Civil Appellate Procedure 7(a) in effect before January 1, 2012, which provided, in relevant part: (1) [W]henever an appellant entitled thereto desires a stay on appeal, he may obtain a stay by filing a supersedeas bond in the superior court in accordance with these rules. . . . The amount of the bond may be determined upon stipulation or upon motion. A hearing on such motion shall be held forthwith. The court may make any further order, other than or in addition to the bond, appropriate to preserve the status quo or the effectiveness of the judgment. The stay is effective when the supersedeas bond, as stipulated or as ordered by the court, is filed, and all other conditions imposed by the court have been complied with. (2) The bond shall be conditioned for the satisfaction in full of the judgment remaining unsatisfied, together with costs, interest, and any damages reasonably anticipated to flow from the granting of the stay including damages for delay, if for any reason the appeal is dismissed or if the judgment is affirmed[.] . . . In determining the amount of the bond, the court shall consider, among other things, whether there is other security for the judgment, or whether there is property in controversy which is in the custody of the sheriff or the court. ¶38 Thus, under the former rule, the court generally required a judgment debtor to post a supersedeas bond in the 20 amount of the unsatisfied judgment, plus costs, interest, and any attendant damages. Salt River Sand and Rock, 222 Ariz. at 107 n.5, ¶ 12, 213 P.3d at 256 n.5. provision in former Rule 7(a)(2), Relying on the delay the Hoffmans argue the superior court should have required Zipprich to post a bond to cover (1) the loss of interest on the closing funds since the entry of stay monies the Hoffmans could otherwise receive on the closing funds were they not held in a non-interest bearing account with the clerk of the court, and (2) the reasonable damages and reasonably anticipated damages the Hoffmans have or will incur since the entry of the stay, namely, the taxes the Hoffmans have been required to pay to maintain good title to the subject properties. We need not decide, however, whether the superior court abused its discretion under the previous version of Rule 7(a) because the Rule had been superseded when Zipprich filed its April 2012 motion to stay the proceedings. ¶39 The current version of Rule 7(a)(2) provides, relevant part: Amount of the Bond. The amount of the bond shall be set as the lesser of the following: (A) The total amount of damages awarded, excluding punitive damages; (B) Fifty per cent of the appellant s net worth; (C) Twenty-five million dollars. 21 in Thus, subsection (a)(2) no longer expressly provides that a bond shall include any damages reasonably anticipated to flow from . . . [the] delay. ¶40 We note that, under the current version of the Rule, as well as the former version, subsection (a)(1) grants a court discretion to make any further order, other than or in addition to the bond, appropriate to preserve effectiveness of the judgment. the status quo or the The Hoffmans did not frame their supersedeas bond argument to the superior court under the status quo determine provision, whether discretion had the it however, superior been and court requested we therefore would but have declined Zipprich to post a supersedeas bond under 7(a)(1). need not abused its to require See Winters v. Ariz. Bd. of Educ., 207 Ariz. 173, 177, ¶ 13, 83 P.3d 1114, 1118 (App. 2004) ( When a challenge is not raised with specificity and addressed in the [superior] court, we generally do not consider it on appeal. ). the superior court abused its Therefore, we cannot say that discretion by denying the Hoffmans request for a supersedeas bond. IV. ¶41 Attorneys Fees The Hoffmans request an award of their attorneys fees incurred on appeal and in the special actions. For the appeal in 1 CA-CV 12-0072, the Hoffmans cite A.R.S. § 12-341.01 (2003) as the basis for their fee award; for 1 CA-SA 12-0247, the 22 Hoffmans cite A.R.S. §§ 12-341.01, -348(A)(4), and -349(A)(3) (2003) as the basis for their fee award; and for 1 CA-SA 120280, the Hoffmans cite A.R.S. §§ 12-348(A)(4) and -349(A) as the basis for their fee award. ¶42 In any contested action arising out of a contract, express or implied, the court may award the successful party reasonable attorneys fees. pivotal question is A.R.S. § 12-341.01. whether the claims at Here, the issue in this litigation arise out of an express or implied contract. See Chaurasia v. General Motors Corp., 212 Ariz. 18, 26, ¶ 24, 126 P.3d 165, 173 (App. 2006). Attorneys fees are not recoverable [] if [a] contract serves only as a factual predicate for the action and not its essential basis. at 173. Id. at 26, ¶ 25, 126 P.3d We must examine the nature of the action and the surrounding circumstances to determine whether the claim is one arising out of a contract. Id. causal claim connection attorneys fees. ¶43 with the The contract must have some to justify an award of Id. We conclude this litigation did not arise out of a contract. Lurking in the background are two contracts, the Hoffmans purchase agreement with Wood-McCaslin and Zipprich s loan agreement with Wood-McCaslin. Zipprich s garnishment claim to did the closing monies Hoffmans/Wood-McCaslin certainly purchase 23 not agreement. arise out Although of the not as readily apparent, we likewise conclude that Zipprich s garnishment claim to the closing monies did not arise out of the Zipprich/Wood-McCaslin agreement for purposes of A.R.S. § 12341.01. Zipprich McCaslin based obtained on a default Wood-McCaslin s judgment failure to against repay Wood- the loan monies under the terms of the Zipprich/Wood-McCaslin agreement. Thus, Zipprich would not have obtained a judgment against WoodMcCaslin but for the Zipprich/Wood-McCaslin agreement and WoodMcCaslin s claim to breach the judgment, of closing however, Therefore, we that not conclude agreement. monies the is Zipprich s predicated upon garnishment its Zipprich/Wood-McCaslin that this indirect default agreement. connection to a contract is insufficient to support an award of attorneys fees pursuant to A.R.S. § 12-341.01 in 1 CA-CV 12-0072 and 1 CA-SA 12-0247. ¶44 cite We now turn to the other statutory bases the Hoffmans to actions. support an Section award of attorneys 12-348(A)(4), which fees in entitles the a special party who prevails in a special action challenging an action by this state . . . against a party to attorneys fees, is inapplicable here. Finally, Zipprich did not engage in any conduct in successfully litigating these special actions that would subject it to fees pursuant to A.R.S. § 12-349(A). the Hoffmans request for attorneys fees. 24 Therefore, we deny CONCLUSION ¶45 For the foregoing reasons, we affirm the superior court s dismissal of Zipprich s writ of garnishment. We also affirm the superior court s entry of stay pending appeal and its denial of the Hoffmans request for a supersedeas bond. We award the Hoffmans their taxable costs on appeal upon their compliance with Arizona Rule of Civil Appellate Procedure 21. _/s/___________________________ PHILIP HALL, Judge CONCURRING: _/s/__________________________________ MARGARET H. DOWNIE, Presiding Judge _/s/__________________________________ MAURICE PORTLEY, Judge 25

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